Investing🦋 in real estate is a great way to diversify your portfolio, generate income, and take advantage of unique tax benefits. You can use a real estate crowdfunding platform to invest in a variety of commercial, residential, and industrial real estate projects at a fraction of the cost.

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Investopedia's Best Real Estate Crowdfunding Platforms

Investopedia’s experts put 19 companies through a rigorous evaluation process to identify the best real estate crowdfunding platforms for you and your real estate inv🗹esting needs. We collected 851 data points and used our subject matter expertise to develop a process for finding the best r🐈eal estate crowdfunding platforms, focusing on fees, transparency, investment selection, and more.

Winners

Frequently Asked Questions

  • How do I invest in real estate?

    While you can invest in real estate by purchasing a rental or commercial property, not everyone has the cash required to invest to do so. Real estate investment trusts (REITs) are publicly traded investment vehicles that offer real estate exposure without having to put forth a down payment or be a landlord. You can also invest in real estate via online real estate crowdfunding investment🌳 platforms and real estate investment groups (REIGs), and there are avenues to rent properties you already own, such as with Airbnb.

  • Does real eไstate or the stock market perform better?

    Historically, stocks have generally outperformed real estate in terms of average returns. However, the performance can vary based on factors like location and timing. From March 1992 to March 2022, the average growth rate of the U.S. housing market was 5.4%. The S&P 500 witnessed annualized returns of 9.65% from the beginning of 1992 to the same period in 2022.

  • What is a Real Estate Investment Trust (REIT)?

    A real estate investment trust (REIT) is a company that owns, operates, or finances income-generatin🐼g real estate. REITs allow you to invest in most real estate property types, including apartment buildings, cell towers, data centers, hotels, medical facilities, offices, retail centers, and warehouses, which are generally not feasible for individual investors to purchase directly. You can invest in REITs—as well as REIT mutual funds and REIT ETFs—by purchasing shares through a brok𓃲er.

  • Is flipping houses an easy way to make money?

    While flipping houses can in fact be a lucrative endeavor🐈, it requires a lot of research, up-front capital, time, and patience. Flipping houses also requires hard labor skills to improve the home’s value. If you aren’t adept at handiwork, you will need to 𝓡pay a professional to do the renovations and repairs, further reducing the profit potential of your investment.

Key Terms

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Passive Real Estate Investing: Owning properties without having to manage them actively.
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What Is a Real Estate Consultant? Definition, Types𝓰, Vs. Agent
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What Is a Collate𒅌ralized Mortgageꦕ Obligation (CMO)?
Income Approach: A real estate appraisal method that allows investors to estimate the value of a property based on the income it generates.
Income Approach: What It Is, How It's Calculated, Example
Real Estate
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Real Estate Investment Trust (REIT)
REIT: What It Is and How to Invest
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10 Habits of Successful Real Estate Investors
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Investing in Property Tax Liens
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Understanding Return on Rentals: A ♏Comprehensive Guide
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The Ins and Outs of Seller-Financed 🃏Real Esꦫtate Deals
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The Federal Housing Administration's (FHA) Minimum Property Standards
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Private Mortgage𝓡 Insurance (PMI) Cost and How to Avoid It
Real Estate vs. Real Property: What's the Difference?
Capital Improvement: Permanent structural changes to a property that enhance its alue, increase its useful life, or allow for a new use.
What Is 𒈔a Capital Improvement, and How Does It W🍰ork?
Commercial Real Estate
Commercial Real Estate: Definition and Types
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Cꦐonstruction Loan: Definition, How It Wo꧃rks, and Example
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Homeowners Association
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Tenancy in Common
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Earnest Money
Earnest Money: Definition and How It Works in♓ Real Estate
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How To Value Real Estate Investments
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Cash-on-Cash Yield: Definitio🎃n, Formula f🐟or Calculating, and Example
Home Savings Money
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Is Owning A Rental Property Wor🎶th It? Pros, Cons and Tips
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Has Real Estate or the Stock Market Performed Better Historicallꦉy🌳?
Gift of Equity: The sale of a property below market value to someone with whom the seller has a close relationship.
Gift of Equity: What It Is, How It Work♑sౠ, Taxes, and Pros & Cons
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Organization
What Is an Opco? Definition, Example, Vs. Propco
Price-to-Rent Ratio
Price-to-Rent Ratio: Determining if It's Better To Buy or Rent
Section 1231 Property: The tax on a gain from the sale of a depreciable business property that has been held for over a year.
Sectio💟n 1231 Property: Definition, 🦋Examples, and Tax Treatment
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Key Reasons to Invest in Real Estate
The word Values
Terminal Capitalization Rat♛e: Definition and Calculation Example
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Right of F🦩irst Offer (ROFO) Definition and How It Works
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💦Subprime Meltdown: What Was It, What Ha🐓ppened, Consequences
Capitalization Rate
C🅘apitalization Rate: Cap Rate Defined With Formula and Examples
Hard Money Loan: A type of loan that is secured by real property.
Hard Money Loan: ꦓDefinition, Uses, and Pros &am🌺p; Cons
Cashꦇ Available for Distribution (CAD): Meaning and Examples
🍸Average Annual Returns for Long-Term Investments in Real Estate
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What Is a Housing Bubble?
How to Invest in Real Estate Rentals
How to Invest in Rental Property
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Page Sources
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